|Day's Range||0.906 - 0.909|
|52 Week Range||0.8276 - 0.9494|
The dollar has strengthened in early European trade Monday, with investors seeking out this safe haven after the Covid-19 outbreak forced the biggest reversal of U.S. economic reopening to date and the U.S. and China squared off over territorial disputes in the South China Sea. The number of Covid-19 cases globally has now passed the 13 million mark, according to Johns Hopkins University data, jumping by one million cases over the last five days. This has resulted in demand for the dollar as hopes of a quick economic recovery fall, with some countries, including the U.S., re-imposing lockdown measures to curb the spread of the virus.
Elsewhere, the USD/CNY pair slid 0.2% to 6.9878. The yuan was boosted by better-than expected inflation data for June, with producer prices falling 3% year-on-year. The drop in the PPI was smaller compared with the previous month’s drop of 3.7% and the 3.2% drop analysts had generally forecast. However, the pair is being supported most by the rally in Chinese stocks, which continued for an eighth straight day on Thursday.
Additionally, the AUD/USD pair gained 0.6% to 0.6979, helped by rising prices for copper and other export commodities. The Reserve Bank of Australia will meet on Tuesday for its policy meeting and is expected to keep its key rate at 0.25%.
Sterling was under pressure in early European trade Tuesday, with the release of the final gross domestic production figure suggesting that the contraction in the first quarter was deeper than originally estimated. This figure was revised downward from the previous estimate of a 2% decline and marks the joint largest quarterly contraction of the U.K. economy since 1979.
The dollar edged lower in early European trade Thursday, ahead of two major monetary developments in Europe. The European Central Bank will announce the results of its latest long-term lending operation, which is the first at which banks can borrow at the new lower limit of as low as 1%. Given the doubts over the effectiveness of negative interest rates, a high take-up would constitute a vote of confidence in the ability of the ECB to keep supporting the economy through monetary policy (and vice versa).
The dollar was largely unchanged in early European trade Monday, but risk-sensitive currencies, like the Australian and New Zealand dollars were hit hard by fears of a second wave of the Covid-19 virus, particularly in China. At 3:10 AM ET (0710 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was up marginally at 97.332. China reported dozens of new cases of the Covid-19 virus over the weekend, linked to a major wholesale food market in Beijing.
EURGBP struggled to gather upward momentum after a failed recovery attempt on Wednesday morning. The currency pair is now trading near its lowest level in one month, as recession fears hit the Eurozone economy.
We strongly believe China wants to show some strength in their perceived economic recovery and that these PMI numbers are somewhat “manufactured for effect”.
On Tuesday and Wednesday things have been calmer, we will try to look for more technical setups which are more based on dots and less on panic and fear.
The European parliament will approve Britain’s departure from the EU later on Thursday, setting the scene for the U.K. to leave the bloc. British Prime Minister Johnson has hailed the departure, but European officials are much less enthusiastic.
Investing.com - The U.S. dollar is showing some strength against the safe haven Japanese yen Friday as a degree of calmness returns to traders who have fretted all week over the new pneumonia-like virus in China.